Ministry of Innovation —

Verizon leads top wireless carriers in bill size, at $148 a month

T-Mobile's $120 average bill is cheap by comparison.

Verizon Wireless has the largest average bill size among the four major mobile carriers in the US, while T-Mobile has the lowest, according to a survey released yesterday by research firm Cowen and Company.

The numbers reflect postpaid subscribers and include all taxes and fees. They include both single users and family plan customers. Across the industry, 68.5 percent of postpaid respondents were paying for family plans, with 26.1 percent on individual plans and 5.4 percent on corporate plans. Verizon had the most family and corporate plans, with 72.3 percent of respondents paying for family plans and 7.0 percent on corporate plans. The report did not break out the average individual bill size by carrier.

This was the second time Cowen performed the quarterly survey. It uses a random sample, so the respondents are different each time. In Q3 2013, Verizon also led with an average bill size of $153, and T-Mobile had the lowest with $133. AT&T and Sprint switched places, with AT&T averaging $147 in Q3 2013 and Sprint averaging $143.

A Verizon spokesperson declined to comment on the findings but said, "we do offer many options at different price points for customers so they can find the plan that suits them best."

Cowen tried to determine what percentage of customers plan to leave their wireless carriers, but the numbers fluctuated wildly between Q3 and Q4 with no explanation, making it hard to know whether to take the answers seriously. When asked if they plan to switch from their current providers, 17 percent of Verizon postpaid customers said yes in Q4, up from 15.7 percent the previous quarter. 15.4 percent of T-Mobile customers said yes to the same question, down from 42.9 percent the previous quarter. 31.4 percent of Sprint customers said they plan to switch, down from 41.7 percent the previous quarter. 11.1 percent of AT&T customers said they plan to switch, down from 31.6 percent the previous quarter.

Actual customer turnover is more consistent over time. UBS research found that in 2012, Verizon lost 0.91 percent of its customers each month, while AT&T lost 1.08 percent, Sprint lost 2.02 percent, and T-Mobile lost 2.35 percent, according to a Wall Street Journal article in July 2013. T-Mobile may end up stealing more customers from its rivals than usual, however, because of its new offer to pay off the early termination fees of customers who switch and turn in their old phones.

The carriers' various perceived strengths came through when Cowen and Company asked customers why they chose their service provider. "The top responses for why respondents chose their current carrier for AT&T were network coverage and quality," the Cowen report said. "Similar to last [quarter], the top reasons for choosing Sprint was for the unlimited data plan and better price, for T-Mobile was better price and unlimited data plan, and for Verizon was network coverage and network quality."

Most customers who plan on switching want to do so to get a lower price, Cowen's survey found.

Verizon has taken these numbers, or similar numbers, and bragged to their investors about them, and talked about plans to increase the average bill size.

But when they talk to their customers, they talk about value and savings.

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I don't know why more people don't get on prepaid plans. T-Mobile's prepaid gives you 100 min, 5GB of 4G data, and unlimited text for $30 a month.

Yes, and you get better software on your phone as well. But it requires people to be off contract, and it requires people to have money to drop up front (and know-how). Those are higher barriers to entry than you'd think.

My girlfriend, for example, is tech savvy but not super familiar with the ins and outs of the wireless industry. She's good with numbers, though, and was very happy when I set her up with the $30/mo T-mo plan on a nexus 4 about a year ago and saves over $60/mo compared to her previous verizon plan.

At first glance it looks like T-Mobile is the best choice for consumers. But all the comparison charts and tables I've ever seen confuse the issue so much, with so many terms and apples-to-oranges comparisons, 3G, 4G, coverage area, data limits, etc. that it's impossible to pick a clear winner based on your usage habits.

I don't know why more people don't get on prepaid plans. T-Mobile's prepaid gives you 100 min, 5GB of 4G data, and unlimited text for $30 a month. Virgin Mobile (Spring MVNO) gives you 300 min, 2.5GB of 4G and unlimited text for $35.

Yes the phones are more expensive, but you end up paying for it either way with monthly prices that are like 4 times more.

If the T-Mobile rep I talked to the other day was telling the truth, then prepaid is 2nd class citizen, first to be bumped from crowded towers... I'm not convinced she wasn't full of it though.

I'm surprised Verizon's average is not higher, my wife and I share 4GB of data at $170/month, contract just ended and we're looking to get comparable on T-Mobile for $109/month.

It's true. pre-paids are basically 2nd class citizens.

I'm on the $30 for 100min/unlimited text/5GB data plan and I was at the Seahawks vs Rams game 2 weeks ago and even though I had FULL LTE bars, I had no ability to connect to the internet or even send texts for around 30 minutes. I got a usable signal later on when it dropped down to 3G and after the game started, I had usable signal on LTE again.

A bit OT, but the column chart is awful. It makes a 23% difference between the lowest and highest look like a 140% difference. Why not start at 120 and have the other plans look infinitely more expensive? The chart conveys less than no information, it conveys misinformation. Yes, the numbers are there, but if you are relying on those, just report those in a table. If you have a graphic, it should be useful. Even if this is from someone else, the choice to include it in this article is a dubious one.

Yes, Verizon is the most costly of the major providers. They also provide the most reliable service. AT&T actual real world coverage is garbage even in a major city like Chicago. I would love to have a cheaper bill but saving money isn't much of a benefit if I can't use my phone a third of the time the way it happened when I was with AT&T

Wireless carriers are continuing to push customers to smartphones and therefore data plans. The cost of the average plan consists of data, not voice or text. Companies like Republic Wireless are demonstrating that these prices are outrageous and can be substantially cheaper. One can hope there will be enough consumer demand to change mainstream wireless carrier business models.

I pay $150/month total for myself AND my wife on US Cellular. $75/person. This is not a prepaid plan, but a subsidized-phone contract with an upgrade for each of us every 18 months (assuming you use the points you earn monthly for "upgrade accelerators" instead of cases or bluetooth headsets). This plan includes 1500 shared minutes per month, 5 gb/phone data per month, and unlimited texting. Phone selection isn't as broad as on other carriers, but we've still got the most popular models--iPhone 5S and 5C, Galaxy S4 and Note 3, Moto X, at the same subsidized prices you'd pay at Verizon or AT&T. Rural coverage is fantastic and US Cellular's 4G network, while not huge, is getting much better. And I can personally vouch that US Cellular has the best customer service in the industry...simply no comparison to what I went through as a Verizon customer.

Jeez… I pay about $50 a month for unlimited texts, calls and MMS with 5GB data. Granted, I bought my phone unsubsidized, so that probably halves the monthly cost due to no downpayment, but still…

And I live in Norway, where average yearly salary for industrial workers is almost $60,000 before tax…

What percentage of your income do you keep after taxes? I don't know much about Norway. It makes sense that we pay somewhat more in the US, just due to the size of the country and population density, but I'm guessing we do overpay due to lack of good competition or lack of good regulation.

At first glance it looks like T-Mobile is the best choice for consumers. But all the comparison charts and tables I've ever seen confuse the issue so much, with so many terms and apples-to-oranges comparisons, 3G, 4G, coverage area, data limits, etc. that it's impossible to pick a clear winner based on your usage habits.

I just switched us over to Ting last month from Sprint. Ting's on Sprint's network but is PAYGO. For comparison, for two phones Sprint cost us about $100/month without a data plan and with unlimited texts & minutes. Ting estimates that this month we will owe $33 plus taxes and surcharges, probable total of ~$37, and that includes (minimal) data.

I reused my old Sprint featurephone and bought my wife a new Nexus 5. Even at $350 for the phone it won't take long for us to come out ahead. Activation was easy and signal strength, etc. seems comparable to straight Sprint. Only downside I've noticed so far is that I can't activate Google Voice for my voicemail, while Sprint can, and, of course, you need a CDMA-compatible phone.

That's for a family plan with 5 lines - One dumbphone and 4 iPhones (two unlimited data and two 2GB - with unlimited text).

I've found the Verizon service to be very good, and some of the places that I've visited would have had 2G service on T-mobile while they have full verizon coverage, but admittedly I haven't spent much time in those places.

My wife and I use Ting as well, and our combined monthly bill has averaged around $23, including all fees.</brag>

We're pretty light users, though, in that most of our data usage is via WiFi rather than cellular, and we primarily use Skype for voice. But their rates scale pretty darn reasonably as you move towards heavier usage.

Network coverage is Sprint, which ain't so amazing, but at least in the S.F. Bay Area, isn't crap either.

I'll leave off providing a "Bonus for me if you sign up!" link, though.

I've been looking at a no-contract iPhone through Virgin Mobile; $35 a month, 2.5 GB data (throttled after that), unlimited text. They use Sprint's network.

What keeps stopping me is the lack of 4G in my area. Which is what's really frustrating, as I'm in South Jersey, just outside Philly. If Sprint's own map is to be believed, 4G stops at the Delaware River. Which would be fine if I were in the boondocks. I just don't understand how such a densely packed suburban area hasn't gotten 4G yet.

At the end of the day, I'm probably going to go with Verizon. As others have pointed out, they're not the cheapest, but their 4G coverage is by far the best. They do have a prepaid plan, but I'm limited to the iPhone 4, unfortunately.

I sometimes wonder what would happen if Google or Apple were to jump into the provider side of the mobile industry.

I'm on the $30 for 100min/unlimited text/5GB data plan and I was at the Seahawks vs Rams game 2 weeks ago and even though I had FULL LTE bars, I had no ability to connect to the internet or even send texts for around 30 minutes. I got a usable signal later on when it dropped down to 3G and after the game started, I had usable signal on LTE again.

I'm not sure that's a perfect example: were there others around you getting great throughput? My experience (non-prepaid) is that in crowded locals with high mobile data traffic (e.g. Embarcadero BART Station, SF) you'll see solid connection and no actual throughput.

I don't know why more people don't get on prepaid plans. T-Mobile's prepaid gives you 100 min, 5GB of 4G data, and unlimited text for $30 a month. Virgin Mobile (Spring MVNO) gives you 300 min, 2.5GB of 4G and unlimited text for $35.

Yes the phones are more expensive, but you end up paying for it either way with monthly prices that are like 4 times more.

Main reason I'm still with Verizon is that I spend multiple weeks a year in the middle of nowhere, and I haven't gone somewhere yet where I couldn't get service

I'm a TMobile customer, but AT&T is making a push into rural areas. I've seen some of their sites. We're talking 100% LPG generator power and microwave point to point back haul. These guys are taking rural service seriously.

I spend time in the middle of nowhere and use satellite messaging, but I'm considering looking for a MVNO to use these AT&T towers. TMobile is too cheap to roam on them.

Anyway, my point is with your Verizon phone, you probably don't see the AT&T towers. With my TMobile phone I see them, but can't use them.

I know I'm in the minority here, but my wife and I pay just under $130 for 2 smartphones on Verizon with unlimited talk (we both use a ton of minutes, so its nice to have) and unlimited text (meh) with more than enough Data for us.

We do this because my parents are on our plan as well, and they both have smartphones and we split the bill. It comes out to about $250 after both the taxes/fees and my company discount of 22%. It seems like those discounts are incredibly common, so if you're not getting one, check with your employer.

Anyways, I tend to use like 3-4GB of Data per month but the three of them combined rarely use more than 3 between them.

I am by no means a schill for Verizon, I would love to switch to T-mo on principle, but Verizon's network is just so bloody good and under the right circumstances can be quite affordable.

For what it's worth, we have 2 lines on Verizon. Per the posts above, I looked into the Ting thing and according to their calculator (which allows you to import your actual bills), we would not save. In fact, when adding in device purchases, it's not even close. Oh well.

When I came to Canada from the US 7 years ago, I couldn't believe how badly Canadians were getting ripped off on cell phone plans. Now I only pay $25.00 a month for unlimited Voice/Txt/Picture Messaging (no data). I was considering recently if I felt like paying the $30.00 a month for unlimited Voice/Txt/Data, but wasn't sure if I wanted data.

What happened to cell phone plans in the US? They were pretty affordable before I left! I guess they're using data and fancy phones as an excuse to push up the price of contracts?

~$1800/year. While I appreciate the benefits of cell phones, that is $1800/year being spent on something that just several years ago relatively few of us had. Over time the average household has gone deeper into debt despite some basic items, like food getting relatively cheaper. Our cell phones are certainly not helping.

I have to agree with the posters that say 'average bill' metric is pretty meager on the information content. However the nearly equal average bill from provider to provider speaks volume about a lack of competition.

And yes, I do speak with my wallet. I do not own a cell phone. The perceived value for a smart phone is less than $25/month. I'll wait till they reach that price point before I consider it.